Banking MFs lose 6% in a week as US bank crisis hits sentiment

Banking mutual funds (MFS) have lost up to 6% in the last week following the collapse of Silicon Valley Bank (SVB) and Signature Bank that dented investors' sentiment in the banking and financial services space.

The failure of the two US-based banks sent shockwaves across the global financial system and weakened the sentiments in the banking sector in India too, wherein shares took a beating and declined in the range of 3-13% in the week under review. However, experts believe that the direct impact on the Indian banking sector was negligible to low.

The incessant selling in the bank stocks is clearly reflected in the banking sector mutual funds, as evident from the short-term performance returns of the 16 schemes under the category.